FX levels to watch – EUR/USD, GBP/USD, EUR/GBP

Sterling strength has been driving GBP/USD higher and EUR/GBP lower. Meanwhile, EUR/USD continues to consolidate, as we await the triangle breakout.

Pound sterling
Source: Bloomberg

EUR/USD triangle continues to dictate

EUR/USD has rallied back up to the top end of a symmetrical triangle formation once more this morning, with the pair continuing to consolidate.

The breakout signal remains a move through the first swing high or low. As such, watch out for an hourly close above $1.1941 for a bullish outlook, or below $1.1868 for a more bearish view.

GBP/USD breaks higher once more

Yesterday’s GBP/USD spike took the pair to a near month-long high, in a move that provided a continuation of the bullish reversal that has been forming in recent weeks. This bullish phase looks like a retracement of the wider move from that $1.3269 high. As such, it makes sense to look for $1.3080 and $1.3152 (61.8% and 76.4%) as targets for when this rally might come back under pressure.

Further upside looks likely, yet there is a threat that we could start to see the pair retrace yesterday’s sharp rally. A bullish outlook remains as long as we remain above $1.2909, with a move lower providing us with a potential bullish entry at Fibonacci support.

EUR/GBP trading lower, as wedge forms

EUR/GBP dropped into a new lower low yesterday, following a 76.4% retracement earlier in the week. We are now seeing a move higher from trendline support, indicating the creation of a falling wedge pattern. That is a bullish formation, which points towards an eventual bullish breakout.

However, until we see a move through £0.9227, a bearish outlook remains, with the 61.8% retracement at £0.9191 looking like an attractive area for shorts if we get up to the point.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.